EXHIBIT 4.2
SOMAXON PHARMACEUTICALS, INC.
AMENDED AND RESTATED
INVESTOR RIGHTS AGREEMENT
JUNE 2, 2005
TABLE OF CONTENTS
PAGE
SECTION 1. CERTAIN DEFINITIONS.............................................................................1
SECTION 2. COVENANTS OF THE COMPANY........................................................................3
2.1 Financial Statements and Reports to Stockholders; Budget........................................3
2.2 Inspection......................................................................................4
2.3 Confidentiality.................................................................................4
2.4 Proprietary Information and Inventions Agreements...............................................4
2.5 Restriction on Sales by Employees...............................................................4
2.6 Qualified Small Business........................................................................5
2.7 Employee Stock..................................................................................5
2.8 Board Meeting; Compensation of Directors........................................................5
2.9 Compensation Committee..........................................................................5
2.10 Board Approval. ................................................................................6
2.11 Termination of Covenants........................................................................6
SECTION 3. REGISTRATION RIGHTS.............................................................................7
3.1 Demand Registration.............................................................................7
3.2 Piggyback Registration.........................................................................10
3.3 Expenses of Registration.......................................................................11
3.4 Registration Procedures........................................................................11
3.5 Information Furnished by Holder................................................................13
3.6 Indemnification................................................................................13
3.7 Limitations on Registration Rights Granted to Other Securities.................................15
3.8 Transfer of Rights.............................................................................15
3.9 Market Stand-off...............................................................................16
3.10 No-Action Letter or Opinion of Counsel in Lieu of Registration;
Conversion of Convertible Securities...........................................................16
3.11 Sale of Convertible Securities to Underwriter..................................................17
3.12 Rule 144 Requirements..........................................................................17
3.13 Termination of Company Agreements..............................................................17
SECTION 4. RIGHT OF FIRST REFUSAL; RIGHT TO PURCHASE SHARES...............................................17
4.1 Right of First Refusal.........................................................................17
4.2 Right to Purchase in Connection with Initial Public Offering...................................19
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TABLE OF CONTENTS
(continued)
Page
4.3 Rights of Affiliated Investors.................................................................20
4.4 Assignment.....................................................................................20
4.5 Termination....................................................................................21
SECTION 5. TRANSFERS OF SECURITIES BY INVESTORS...........................................................21
5.1 Notices........................................................................................21
5.2 Acceptance of Offer............................................................................21
5.3 Allocation of Securities and Payment...........................................................21
5.4 Failure to Exercise............................................................................21
5.5 Assignment.....................................................................................22
5.6 Permitted Transfers............................................................................22
5.7 Termination....................................................................................22
SECTION 6. MISCELLANEOUS..................................................................................22
6.1 Entire Agreement; Successors and Assigns.......................................................22
6.2 Aggregation of Stock...........................................................................22
6.3 Governing Law..................................................................................23
6.4 Counterparts...................................................................................23
6.5 Headings.......................................................................................23
6.6 Notices........................................................................................23
6.7 Amendment of Agreement; Waivers................................................................23
6.8 Amendment and Termination of Prior Rights Agreement............................................23
6.9 Additional Investors...........................................................................23
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SOMAXON PHARMACEUTICALS, INC.
AMENDED AND RESTATED
INVESTOR RIGHTS AGREEMENT
THIS AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT (this "AGREEMENT") is
made as of June 2, 2005, by and among SOMAXON PHARMACEUTICALS, INC., a Delaware
corporation (the "COMPANY"), and each of the entities and persons listed on
Schedule A hereto (collectively, the "INVESTORS").
RECITALS
A. The Company and certain of the Investors are parties to that certain
Amended and Restated Investor Rights Agreement dated as of June 10, 2004 (the
"PRIOR RIGHTS AGREEMENT").
B. Certain of the Investors are purchasing shares of the Company's Series
C Preferred Stock, par value $0.0001 per share (the "SERIES C PREFERRED STOCK"),
and may purchase shares of the Company's Series C-1 Preferred Stock, par value
$0.0001 per share (the "SERIES C-1 PREFERRED STOCK"), pursuant to that certain
Series C Preferred Stock Purchase Agreement of even date herewith (the "PURCHASE
AGREEMENT").
B. The obligations in the Purchase Agreement are conditioned upon the
execution and delivery of this Agreement, and the parties to the Prior Rights
Agreement desire to hereby amend and restate the Prior Rights Agreement in its
entirety.
THE PARTIES AGREE AS FOLLOWS:
SECTION 1. CERTAIN DEFINITIONS.
As used in this Agreement, the following terms shall have the following
respective meanings:
(a) "AFFILIATE" shall mean with respect to any Person, any Person which
directly or indirectly through one or more intermediaries, controls, is
controlled by or is under common control with such Person.
(b) "BOARD" shall mean the Board of Directors of the Company.
(c) "COMMISSION" shall mean the Securities and Exchange Commission or any
other federal agency at the time administering the Securities Act.
(d) "CONVERTIBLE SECURITIES" shall mean the Series A Preferred Stock, the
Series B Preferred Stock, the Series C Preferred Stock and the Series C-1
Preferred Stock.
(e) "FORM S-3" shall mean Form S-3 issued by the Commission or any
substantially similar form then in effect.
(f) "HOLDER" shall mean any Person entering into this Agreement and any
holder of outstanding Registrable Securities or an assignee or transferee of
Registration rights as permitted by Section 3.8.
(g) "INITIATING HOLDERS" shall mean Holders who in the aggregate hold at
least twenty percent (20%) of the then outstanding Registrable Securities.
(h) "MAJOR INVESTOR" shall mean any Holder who holds at least One Million
(1,000,000) shares of Series A Preferred Stock, Series B Preferred Stock, Series
C Preferred Stock or Series C-1 Preferred Stock, or any combination thereof.
(i) "MATERIAL ADVERSE EVENT" shall mean an occurrence having a consequence
that either (i) is materially adverse as to the business, properties, prospects
or financial condition of the Company or (ii) is reasonably foreseeable, has a
reasonable likelihood of occurring, and if it were to occur would reasonably be
expected to materially adversely affect the business, properties, prospects or
financial condition of the Company.
(j) "PERSON" shall mean an individual, a corporation, a partnership, a
trust or unincorporated organization or any other entity or organization.
(k) "PREFERRED DIRECTORS" shall have the meaning set forth in the
Company's Restated Certificate of Incorporation.
(l) "QUALIFIED PUBLIC OFFERING" shall mean a firmly underwritten public
offering of the Company's Common Stock Registered on the Nasdaq National Market
or the New York Stock Exchange under the Securities Act and involving gross
proceeds to the Company of at least Thirty Million Dollars ($30,000,000) (prior
to deduction for underwriters' discounts and other expenses relating to such
public offering, including, without limitation, fees of the Company's counsel)
and the price to the public is at least Three Dollars and Thirty-Seven and
One-Half Cents ($3.375) per share (equitably adjusted for all stock splits,
sub-divisions, stock dividends, combinations and the like).
(m) The terms "REGISTER," "REGISTERED" and "REGISTRATION" refer to a
registration effected by preparing and filing a registration statement in
compliance with the Securities Act ("REGISTRATION STATEMENT"), and the
declaration or ordering of the effectiveness of such Registration Statement.
(n) "REGISTRABLE SECURITIES" shall mean (i) all Common Stock not
previously sold to the public issued or issuable upon conversion of any of the
Convertible Securities purchased by or issued to the Investors, (ii) all shares
of Common Stock owned by the Investors, (iii) any shares of Common Stock issued
or issuable upon conversion of any Convertible Securities granted registration
rights pursuant to Section 3.7 of this Agreement, and (iv) any Common Stock of
the Company issued as (or issuable upon the conversion or exercise of any
warrant, right or other security that is issued as) a dividend or other
distribution with respect to, or in exchange for, or in replacement of, the
Common Stock described in clauses (i) through (iii) of this definition.
(o) "REGISTRATION EXPENSES" shall mean all expenses incurred by the
Company in complying with Sections 3.1 or 3.2 of this Agreement, including,
without limitation, all federal and state registration, qualification and filing
fees, printing expenses, fees and disbursements of counsel for the Company and
fees and disbursements of not more than one (1) special counsel for the Holders
(if different from the Company) not to exceed Twenty-Five Thousand Dollars
($25,000), blue sky fees and expenses, and the expense of any special audits
incident to or required by any such Registration.
(p) "SECURITIES ACT" shall mean the Securities Act of 1933, as amended, or
any similar federal statute, and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the time.
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(q) "SELLING EXPENSES" shall mean all underwriting discounts and selling
commissions applicable to the sale of Registrable Securities pursuant to this
Agreement.
(r) "SERIES A PREFERRED STOCK" shall mean the Company's Series A Preferred
Stock, par value $0.0001 per share.
(s) "SERIES B PREFERRED STOCK" shall mean the Company's Series B Preferred
Stock, par value $0.0001 per share.
(t) "SERIES C DIRECTOR" shall have the meaning set forth in the Company's
Restated Certificate of Incorporation.
(u) "SPECIAL REGISTRATION STATEMENT" shall mean (i) a registration
statement relating to any employee benefit plan, (ii) with respect to any
corporate reorganization or transaction under Rule 145 of the Securities Act,
including any registration statements related to the resale of securities issued
in such a transaction, or (iii) a registration related to stock issued upon
conversion of debt securities.
SECTION 2. COVENANTS OF THE COMPANY
2.1 Financial Statements and Reports to Stockholders; Budget. The Company
shall deliver to each Investor:
(a) As soon as practicable after the end of each fiscal year of the
Company, and in any event within one hundred twenty (120) days thereafter, an
audited consolidated balance sheet of the Company as of the end of such year and
audited consolidated statements of income, stockholders' equity and cash flows
for such year, which year-end financial reports shall be in reasonable detail
and shall be accompanied by the opinion of independent public accountants of
recognized standing selected by the Company.
(b) For so long as an Investor or subsequent holder of Convertible
Securities holds or is deemed to hold at least One Hundred Fifty Thousand
(150,000) shares of Registrable Securities (equitably adjusted for all stock
splits, subdivisions, stock dividends, combinations and the like), as soon as
practicable after the end of each fiscal quarter of the Company, and in any
event within forty-five (45) days thereafter, unaudited financial statements of
the Company on a quarterly basis prepared in accordance with generally accepted
accounting principles and fairly reflecting the fiscal affairs of the Company to
the date thereof (with the exception that no notes need be attached to such
statements and year-end audit adjustments may not have been made).
(c) For so long as an Investor or subsequent holder of Convertible
Securities holds or is deemed to hold at least One Hundred Fifty Thousand
(150,000) shares of Registrable Securities (equitably adjusted for all stock
splits, subdivisions, stock dividends, combinations and the like), as soon as
practicable after the end of each month, and in any event within thirty (30)
days thereafter, consolidated balance sheets of the Company and its
subsidiaries, if any, as of the end of each such month and consolidated
statements of income and cash flow for such month and for the current fiscal
year to date.
(d) For so long as an Investor or subsequent holder of Convertible
Securities holds or is deemed to hold at least One Hundred Fifty Thousand
(150,000) shares of Registrable Securities (equitably adjusted for all stock
splits, subdivisions, stock dividends, combinations and the like) within sixty
(60) days prior to the end of each fiscal year, a Board-approved operating
budget and plan forecasting the Company's monthly revenues, expenses and cash
position respecting the next fiscal year.
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(e) Contemporaneously with delivery to holders of Common Stock, a copy
of each report of the Company delivered to holders of Common Stock.
2.2 Inspection. For so long as an Investor or subsequent holder of
Convertible Securities holds or is deemed to hold at least One Hundred Fifty
Thousand (150,000) shares of Registrable Securities (equitably adjusted for all
stock splits, subdivisions, stock dividends, combinations and the like), the
Company shall permit each Investor, at such Investor's expense, to visit and
inspect the Company's properties, to examine its books of account and records
and to discuss the Company's affairs, finances and accounts with its officers,
all at such reasonable times as may be requested by each such Investor;
provided, however, that the Company shall not be obligated pursuant to this
Section 2.2 with respect to a competitor of the Company or with respect to any
information which it reasonably considers to be a trade secret or confidential
information. The rights of an Investor under this Section 2.2 may not be
assigned as part of such Investor's sale of any of the Registrable Securities or
Convertible Securities except with the consent of the Company, which consent
shall not be unreasonably withheld.
2.3 Confidentiality. Each Investor agrees and will cause any
representative of the Investor to hold in confidence and trust and not use or
disclose any information provided to or learned by it in connection with its
rights under this Section 2, except that such Investor may disclose such
information to any general partner, limited partner, member, subsidiary or
parent (and their respective representatives) of such Investor for the purpose
of evaluating its investment in the Company as long as (a) such general partner,
limited partner, member, subsidiary or parent is advised of the confidentiality
provisions of this Section 2.3 and (b) such Investor uses its commercially
reasonable efforts to ensure that such general partner, limited partner, member,
subsidiary or parent holds such information in confidence and trust and will not
use or disclose any information provided to or learned by it except as required
by law. Notwithstanding the foregoing, however, the obligation of each Investor
to hold information confidential as provided herein or any other document or
agreement relating thereto shall not prohibit such Investor from disclosing such
information: (i) to its board of directors, investment advisers, attorneys,
accountants, consultants and other professionals to the extent necessary to
obtain their services in connection with its investment in the Company, provided
that such persons agree to hold such information confidential as provided herein
and in such provisions (as modified by this paragraph); (ii) to any prospective
purchaser of any shares of the Company owned by such Investor as long as such
prospective purchaser agrees in writing to be bound by the confidentiality
provisions as provided herein or in such provisions (as modified by this
paragraph); (iii) to such Investor's investment advisor or any investment
companies managed by such Investor's investment advisor, provided that such
persons agree to hold such information confidential as provided herein or in
such provisions (as modified by this paragraph); or (iv) as required by
applicable law or regulation, regulatory body, stock exchange, court or
administrative order, or any listing or trading agreement concerning such
Investor or the Company. Furthermore, nothing in this Section 2.3 shall restrict
any Investor's ability to disclose the existence or nature of its relationship
with the Company, the nature or amount of its investment in securities of the
Company or to provide its affiliates with quarterly, annual or other reports and
such other information about the Company prepared by such Investor in the
ordinary course of its business, provided that said Investor takes commercially
reasonable measures to ensure that any such affiliates protect the confidential
nature of such confidential information.
2.4 Proprietary Information and Inventions Agreements. The Company agrees
to require each employee and officer of the Company to execute employment and
proprietary information and inventions agreements and each consultant and
advisor of the Company to execute an agreement that provides for confidential
treatment of the Company's proprietary information as a condition of employment
or continued employment or engagement, as the case may be, unless otherwise
approved by the Board.
2.5 Restriction on Sales by Employees. The Company and Holders agree that,
until the time of a Qualified Public Offering, first, the Company, and second,
the Investors will have a right of first
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refusal on all transfers of Common Stock by employees of the Company, subject to
transfers to family members or trusts for the benefit of family members and
other limited exceptions as determined by the Board. The Company agrees to
include appropriate language to this effect in its Bylaws or in future
employment agreements, stock option and/or restricted stock grants, or other
similar agreements with employees.
2.6 Qualified Small Business. The Company covenants that so long as any
Convertible Securities, or the Common Stock into which such shares are
converted, are held by a Holder in whose hands such shares of Common Stock are
eligible to qualify as "qualified small business stock" as defined in Section
1202(c) of the of the Internal Revenue Code of 1986, as amended (the "CODE")
("QUALIFIED SMALL BUSINESS STOCK"), it will (i) comply with any applicable
filing or reporting requirements imposed by the Code on issuers of Qualified
Small Business Stock and (ii) execute and deliver to each Holder, from time to
time, such forms, documents, schedules and other instruments as may be
reasonably requested thereby to cause the Convertible Securities, or the Common
Stock into which such shares are converted, to qualify as Qualified Small
Business Stock. The Company shall submit to the Investors and to the Internal
Revenue Service any reports that may be required under Section 1202(d)(1)(C) of
the Code and any related Treasury Regulations. In addition, within ten (10) days
after any Investor has delivered to the Company a written request therefor, the
Company shall deliver to such Investor a written statement informing the
Investor whether, in the Company's good-faith judgment after a reasonable
investigation, such Investor's interest in the Company constitutes "qualified
small business stock" as defined in Section 1202(c) of the Code, or would
constitute "qualified small business stock," if determination of whether stock
constitutes "qualified small business stock" were made by taking into account
the modifications set forth in Section 1045(b)(4) of the Code. The Company's
obligation to furnish a written statement pursuant to this Section 2.6 shall
continue notwithstanding the fact that a class of the Company's stock may be
traded on an established securities market.
2.7 Employee Stock. With respect to any shares issued or options or rights
granted to employees, consultants and directors after the date hereof, unless
otherwise approved by the Board (including at least two (2) of the Preferred
Directors), the Company shall cause each employee, consultant, and director of
the Company to enter into an agreement providing for vesting of such shares or
options or rights over forty-eight (48) months, with no shares or options or
rights being vested for twelve (12) months from the date of commencement of
services in the case of stock or option grants for new hires, or the date of
issuance or grant in the case of subsequent stock or option grants, at which
time 1/4th of the shares or options or rights shall be vested and 1/48th of such
shares, options or rights shall be vested monthly thereafter. Any options
providing for early exercise and any grant of restricted stock shall provide for
a repurchase option so that upon termination of the employment or consulting
relationship of the stockholder, the Company or its assignee (to the extent
permissible under applicable securities law qualification) retains the option to
repurchase at cost any unvested shares held by such stockholder.
2.8 Board Meeting; Compensation of Directors. The Company hereby covenants
that so long as the holders of the Convertible Securities are entitled to
appoint any members of the Board pursuant to the Company's Restated Certificate
of Incorporation, the Board shall not meet less frequently than quarterly. All
non-employee directors will be compensated by the Company identically; provided
however, that additional compensation may be provided to the Chairman of the
Board or the Chairman of any Committee of the Board provided that such
compensation is approved by the Board, including the approval of at least two
(2) of the Preferred Directors. All out-of-pocket and travel expenses of the
directors incurred in attending Board meetings (or meetings of committees
thereof) or in connection with the performance of their duties as directors
shall be paid or reimbursed promptly by the Company.
2.9 Compensation Committee. The Company hereby covenants to establish and
maintain a Compensation Committee of the Board of Directors, which shall include
at least one (1) Series C Director.
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2.10 Board Approval. So long as at least Three Million Three Hundred
Thirty-Three Thousand Three Hundred Thirty-Four (3,333,334) shares of Series C
Preferred Stock remain outstanding (as adjusted for all stock splits, stock
dividends, consolidations, recapitalizations and reorganizations), the Company
shall not (by amendment, merger, consolidation or otherwise), unless otherwise
approved by the Board (including at least two (2) of the Preferred Directors):
(a) make any loan or advance to, or own any stock or other
securities of, any subsidiary or other corporation,
partnership, or other entity unless it is wholly owned by the
Company;
(b) make any loan or advance to any Person, including any employee
or director, except advances and similar expenditures in the
ordinary course of business or under the terms of a employee
stock or option plan approved by the Board;
(c) guarantee any indebtedness except for trade accounts of the
Company or any subsidiary arising in the ordinary course of
business;
(d) make any investment other than as set forth in the Company's
investment policy or investments in prime commercial paper,
money market funds, certificates of deposit in any United
States bank having a net worth in excess of One Hundred
Million Dollars ($100,000,000.00) or obligations issued or
guaranteed by the United States of America, in each case
having a maturity not in excess of two (2) years;
(e) incur any aggregate indebtedness in excess of Five Hundred
Thousand Dollars ($500,000.00) that is not already included in
a budget approved by the Board, other than trade credit
incurred in the ordinary course of business;
(f) enter into or be a party to any transaction with any director,
officer or employee of the Company or any "associate" (as
defined in Rule 12b-2 promulgated under the Exchange Act of
1934, as amended) of any such person, except for arms-length
transactions;
(g) hire, fire, or change in any material respect the compensation
of the executive officers, including approving any option
plans;
(h) change the principal business of the Company, enter new lines
of business, or exit the current line of business;
(i) sell, transfer, license, pledge or encumber technology or
intellectual property, other than licenses granted in the
ordinary course of business; or
(j) make any material investments, joint ventures, or
acquisitions.
2.11 Termination of Covenants. The covenants of the Company set forth in
this Section 2 shall be terminated and be of no further force or effect upon the
earlier of (a) the effective date of the Company's Registration Statement filed
in connection with the Company's first Qualified Public Offering and (b) the
date when no shares of Registrable Securities or Convertible Securities shall be
outstanding.
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SECTION 3. REGISTRATION RIGHTS
3.1 Demand Registration.
3.1.1. Request for Registration on Form other than Form S-3. Subject to
the terms of this Agreement, in the event that the Company shall receive from
the Initiating Holders at any time after six (6) months after the effective date
of the Company's initial public offering of shares of Common Stock under a
Registration Statement, a written request that the Company effect any
Registration with respect to all or a part of the Registrable Securities on a
form other than Form S-3 for an offering of at least twenty percent (20%) of the
then outstanding Registrable Securities, the reasonably anticipated aggregate
offering price to the public of which would exceed Five Million Dollars
($5,000,000), the Company shall (i) promptly give written notice of the proposed
Registration to all other Holders and shall (ii) as soon as practicable, use its
reasonable best efforts to effect Registration of the Registrable Securities
specified in such request, together with any Registrable Securities of any
Holder joining in such request as are specified in a written request given
within twenty (20) days after written notice from the Company. The Company shall
not be obligated to take any action to effect any such Registration pursuant to
this Section 3.1.1:
(i) after the Company has effected two (2) such Registrations
pursuant to this Section 3.1.1 and such Registrations have
been declared effective;
(ii) during the period starting with the date of filing of, and
ending on the date one hundred eighty (180) days following the
effective date of the registration statement pertaining to any
public offering, other than pursuant to a Special Registration
Statement; provided that the Company makes reasonable good
faith efforts to cause such registration statement to become
effective;
(iii) if within thirty (30) days of receipt of a written request
from the Initiating Holders pursuant to Section 3.1.1, the
Company gives notice to the Holders of the Company's intention
to file a registration statement for a public offering, other
than pursuant to a Special Registration Statement, within
ninety (90) days; or
(iv) if the Initiating Holders propose to dispose of shares of
Registrable Securities that may be immediately registered on
Form S-3 pursuant to a request made pursuant to Section 3.1.3
below.
3.1.2. Right of Deferral of Registration on Form other Than Form S-3. If
the Company shall furnish to all such Holders who joined in the request a
certificate signed by the President of the Company stating that, in the good
faith judgment of the Board, it would be seriously detrimental to the Company
for any Registration to be effected as requested under Section 3.1.1, the
Company shall have the right to defer the filing of a Registration Statement
with respect to such offering for a period of not more than one hundred eighty
(180) days from delivery of the request of the Initiating Holders; provided,
however, that the Company may not utilize this right more than once in any
twelve (12)-month period.
3.1.3. Request for Registration on Form S-3. Subject to the terms of this
Agreement, in the event that the Company receives from a Holder or Holders a
written request that the Company effect any Registration on Form S-3 (or any
successor form to Form S-3 regardless of its designation) at a time when the
Company is eligible to Register securities on Form S-3 (or any successor form to
Form S-3 regardless of its designation) for an offering of Registrable
Securities which such Holders in their good faith discretion determine would
have an anticipated offering price of at least One Million Dollars
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($1,000,000), the Company will promptly give written notice of the proposed
Registration to all the Holders and will as soon as practicable use its best
efforts to effect Registration of the Registrable Securities specified in such
request, together with all or such portion of the Registrable Securities of any
Holder joining in such request as are specified in a written request delivered
to the Company within thirty (30) days after written notice from the Company of
the proposed Registration. There shall be no limit to the number of occasions on
which the Company shall be obligated to effect Registration under this Section
3.1.3, but the Company shall not be required to effect more than two (2) such
Registrations in any twelve (12)-month period. Notwithstanding the foregoing,
the Company shall not be obligated to effect any Registration pursuant to this
Section 3.1.3:
(i) if Form S-3 is not available for such offering by the
Holders;
(ii) if the Holders, together with the holders of any other
securities of the Company entitled to inclusion in such
registration, propose to sell Registrable Securities and
such other securities (if any) at an aggregate price to
the public of less than One Million Dollars
($1,000,000);
(iii) if within thirty (30) days of receipt of a written
request from any Holder(s) pursuant to this Section
3.1.3, the Company gives notice to such Holder(s) of the
Company's intention to make a public offering within
ninety (90) days, other than pursuant to a Special
Registration Statement; or
(iv) if the Company shall furnish to the Holders a
certificate signed by the President of the Company
stating that, in the good faith judgment of the Board,
it would be seriously detrimental to the Company for any
Registration to be effected as requested under Section
3.1.3, the Company shall have the right to defer the
filing of a Registration Statement with respect to such
offering for a period of not more than one hundred
eighty (180) days from delivery of the request of the
Holders requesting such Registration; provided, however,
that the Company may not utilize this right more than
once in any twelve (12)-month period.
3.1.4. Registration of Other Securities in Demand Registration. Any
Registration Statement filed pursuant to the request of the Initiating Holders
under this Section 3 may, subject to the provisions of Section 3.1.5, include
securities of the Company other than Registrable Securities.
3.1.5. Underwriting in Demand Registration.
a. Notice of Underwriting.
If the Initiating Holders intend to distribute the Registrable
Securities covered by their request by means of an underwriting, they shall so
advise the Company, as a part of their request made pursuant to this Section
3.1.1, and the Company shall include such information in the written notice
referred to in Section 3.1.1 or 3.1.3. The right of any Holder to Registration
pursuant to Section 3 shall be conditioned upon such Holder's agreement to
participate in such underwriting and the inclusion of such Holder's Registrable
Securities in the underwriting.
b. Inclusion of other Holders in Demand Registration.
If the Company, officers or directors of the Company holding
Common Stock other than Registrable Securities or holders of securities issued
by the Company other than
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Registrable Securities, request inclusion in such Registration, the Initiating
Holders, to the extent they deem advisable and consistent with the goals of such
Registration, shall, on behalf of all Holders, offer to any or all of the
Company, such officers or directors and such holders of securities other than
Registrable Securities that such securities other than Registrable Securities be
included in the underwriting and may condition such offer on the acceptance by
such persons of the terms of this Section 3.1.
c. Selection of Underwriter in Demand Registration.
The Company shall (together with all Holders proposing to
distribute their securities through such underwriting) enter into an
underwriting agreement with the representative ("UNDERWRITER'S REPRESENTATIVE")
of the underwriter or underwriters selected for such underwriting by the Holders
of a majority of the Registrable Securities being Registered by the Initiating
Holders and agreed to by the Company.
d. Marketing Limitation in Demand Registration.
In the event the Underwriter's Representative advises the
Initiating Holders in writing that market factors (including, without
limitation, the aggregate number of shares of Common Stock requested to be
Registered, the general condition of the market, and the status of the persons
proposing to sell securities pursuant to the Registration) require a limitation
of the number of shares to be underwritten, then (i) first the securities other
than Registrable Securities and (ii) next the securities requested to be
registered by the Company, shall be excluded from such Registration to the
extent required by such limitation. If a limitation of the number of shares is
still required, the Initiating Holders shall so advise all Holders and the
number of shares of Registrable Securities that may be included in the
Registration and underwriting shall be allocated among all Holders in
proportion, as nearly as practicable, to the respective amounts of Registrable
Securities entitled to inclusion in such Registration held by such Holders at
the time of filing the Registration Statement. No Registrable Securities or
other securities excluded from the underwriting by reason of this Section
3.1.5(d) shall be included in such Registration Statement. To facilitate the
allocation of shares in accordance with the above provisions, the Company or the
Underwriter's Representative may round the number of shares allocated to any
Holder to the nearest one hundred (100) shares.
e. Right of Withdrawal in Demand Registration.
If any Holder of Registrable Securities, or a holder of other
securities entitled (upon request) to be included in such Registration,
disapproves of the terms of the underwriting, such person may elect to withdraw
therefrom by written notice to the Company, the underwriter and the Initiating
Holders delivered at least seven (7) business days prior to the effective date
of the Registration Statement. The securities so withdrawn shall also be
withdrawn from the Registration Statement.
3.1.6. Blue Sky in Demand Registration. In the event of any Registration
pursuant to Section 3.1, the Company will exercise its reasonable best efforts
to Register and qualify the securities covered by the Registration Statement
under such other securities or Blue Sky laws of such jurisdictions (not
exceeding twenty (20) at the expense of the Company) as shall be reasonably
appropriate for the distribution of such securities; provided, however, that (i)
the Company shall not be required to qualify to do business or to file a general
consent to service of process in any such states or jurisdictions, and (ii)
notwithstanding anything in this Agreement to the contrary, in the event any
jurisdiction in which the securities shall be qualified imposes a non-waivable
requirement that expenses incurred in connection with the qualification of the
securities be borne by selling stockholders, such expenses shall be payable pro
rata by selling stockholders.
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3.2 Piggyback Registration.
3.2.1. Notice of Piggyback Registration and Inclusion of Registrable
Securities. Subject to the terms of this Agreement, in the event the Company
decides to Register any of its Common Stock (either for its own account or the
account of a security holder or holders exercising their respective demand
Registration rights) on a form that would be suitable for a Registration
involving solely Registrable Securities, the Company will: (i) promptly give
each Holder written notice thereof (which shall include a list of the
jurisdictions in which the Company intends to attempt to qualify such securities
under the applicable Blue Sky or other state securities laws) and (ii) include
in such Registration (and any related qualification under Blue Sky laws or other
compliance), and in any underwriting involved therein, all the Registrable
Securities specified in a written request delivered to the Company by any Holder
within fifteen (15) days after delivery of such written notice from the Company.
3.2.2. Underwriting in Piggyback Registration.
a. Notice of Underwriting in Piggyback Registration.
If the Registration of which the Company gives notice pursuant
to Section 3.2.1 is for a Registered public offering involving an underwriting,
the Company shall so advise the Holders as a part of the written notice given
pursuant to Section 3.2.1. In such event the right of any Holder to Registration
shall be conditioned upon such underwriting and the inclusion of such Holder's
Registrable Securities in such underwriting to the extent provided in this
Section 3. All Holders proposing to distribute their securities through such
underwriting shall (together with the Company and the other holders distributing
their securities through such underwriting) enter into an underwriting agreement
with the Underwriter's Representative for such offering. The Holders shall have
no right to participate in the selection of the underwriters for an offering
pursuant to this Section 3.2.
b. Marketing Limitation in Piggyback Registration.
In the event the Underwriter's Representative advises the
Holders seeking Registration of Registrable Securities pursuant to Section 3.2
in writing that market factors (including, without limitation, the aggregate
number of shares of Common Stock requested to be Registered, the general
condition of the market, and the status of the persons proposing to sell
securities pursuant to the Registration) require a limitation of the number of
shares to be underwritten, the Underwriter's Representative (subject to the
allocation priority set forth in Section 3.2.2(b)) may:
i. in the case of the Company's initial Registered
public offering, exclude some or all Registrable Securities from such
Registration and underwriting; and
ii. in the case of any subsequent registered public
offering, limit the number of shares of Registrable Securities to be included in
such Registration and underwriting to not less than thirty percent (30%) of the
securities included in such Registration (based on aggregate market values).
c. Allocation of Shares in Piggyback Registration.
In the event that the Underwriter's Representative limits the
number of shares to be included in a Registration pursuant to Section 3.2.2(b),
the number of shares to be included in such Registration shall be allocated
(subject to Section 3.2.2(b)) in the following manner: The number of shares, if
any, that may be included in the Registration and underwriting by selling
stockholders shall first be allocated among all the requesting Holders pro rata
according to the respective amounts of Registrable Securities entitled to be
included in such offering by such requesting Holders and then among all other
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holders of securities other than Registrable Securities requesting and legally
entitled to include shares in such Registration, in proportion, as nearly as
practicable, to the respective amounts of securities (including Registrable
Securities) which such Holders and such other holders would otherwise be
entitled to include in such Registration. No Registrable Securities or other
securities excluded from the underwriting by reason of this Section 3.2.2(c)
shall be included in the Registration Statement. To facilitate the allocation of
shares in accordance with the above provisions, the Company or the Underwriter's
Representative may round the number of shares allocated to any Holder to the
nearest one hundred (100) shares.
d. Withdrawal in Piggyback Registration.
If any Holder disapproves of the terms of any such
underwriting, he may elect to withdraw therefrom by written notice to the
Company and the underwriter delivered at least seven (7) business days prior to
the effective date of the Registration Statement. Any Registrable Securities or
other securities excluded or withdrawn from such underwriting shall be withdrawn
from such Registration.
3.2.3. Blue Sky in Piggyback Registration. In the event of any
Registration of Registrable Securities pursuant to Section 3.2, the Company will
exercise its best efforts to Register and qualify the securities covered by the
Registration Statement under such other securities or Blue Sky laws of such
jurisdictions (not exceeding twenty (20) unless otherwise agreed to by the
Company) as shall be reasonably appropriate for the distribution of such
securities; provided, however, that (i) the Company shall not be required to
qualify to do business or to file a general consent to service of process in any
such states or jurisdictions, and (ii) notwithstanding anything in this
Agreement to the contrary, in the event any jurisdiction in which the securities
shall be qualified imposes a non-waivable requirement that expenses incurred in
connection with the qualification of the securities be borne by selling
stockholders, such expenses shall be payable pro rata by selling stockholders.
3.3 Expenses of Registration. All Registration Expenses incurred in
connection with two (2) Registrations pursuant to Section 3.1.1, all
Registrations pursuant to Section 3.1.3 (Form S-3) and all Registrations
pursuant to Section 3.2 shall be borne by the Company. All Registration Expenses
incurred in connection with any other registration, qualification or compliance
shall be apportioned among the Holders and other holders of the securities so
registered on the basis of the number of shares so registered. Notwithstanding
the above, the Company shall not be required to pay for any expenses of any
Registration proceeding begun pursuant to Section 3.1 if the Registration
request is subsequently withdrawn at the request of the Holders of a majority of
the Registrable Securities to be Registered (which Holders shall bear such
expenses), unless the Holders of a majority of the Registrable Securities agree
to forfeit their right to demand Registration pursuant to Section 3.1; provided
further, however, that if at the time of such withdrawal, the Holders have
learned of a Material Adverse Event either (i) not known to the Holders at the
time of their request or (ii) not made known to the Holders within fifteen (15)
days after their request, then the Holders shall not be required to pay any of
such expenses and shall retain their rights pursuant to Section 3.1. All Selling
Expenses shall be borne by the respective holders of the securities Registered
pro rata on the basis of the number of shares registered.
3.4 Registration Procedures. In the case of each registration,
qualification or compliance effected by the Company pursuant to this Section 3,
the Company will:
(a) Keep each Holder whose Registrable Securities are
included in any Registration pursuant to this Agreement
advised as to the initiation and completion of such
Registration. At its expense the Company will: (i) use
its best efforts to keep such Registration effective for
a period of one hundred twenty (120) days or until the
Holder or Holders have completed the distribution
described in the
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Registration Statement relating thereto, whichever first
occurs; and (ii) furnish such number of prospectuses
(including preliminary prospectuses) and other documents
as a Holder from time to time may reasonably request.
With respect to clause (i) of the preceding sentence,
the Company may at any time upon written notice to the
participating Holders and for a period not to exceed
sixty (60) days thereafter (the "SUSPENSION PERIOD")
delay the filing or effectiveness of any registration
statement or suspend the use or effectiveness of any
registration statement (and the Holders hereby agree not
to offer or sell any Registrable Securities pursuant to
such registration statement during the Suspension
Period) if the Company reasonably believes that the
Company may, in the absence of such delay or suspension
hereunder, be required under state or federal securities
laws to disclose any corporate development the
disclosure of which could reasonably be expected to have
an adverse effect upon the Company, its stockholders, a
potentially significant transaction or event involving
the Company, or any negotiations, discussions, or
proposals directly relating thereto. In the event that
the Company shall exercise its rights hereunder, the
applicable time period during which the registration
statement is to remain effective shall be extended by a
period of time equal to the duration of the Suspension
Period. The Company may extend the Suspension Period for
an additional consecutive sixty (60) days with the
consent of the holders of a majority of the Registrable
Securities proposed to be sold by the Holders in the
applicable Registration, which consent shall not be
unreasonably withheld. If so directed by the Company,
the Holders shall use their best efforts to deliver to
the Company (at the Company's expense) all copies, other
than permanent file copies then in such Holders'
possession, of the prospectus relating to such
Registrable Securities current at the time of receipt of
such notice. Notwithstanding anything to the contrary
contained herein, the Company shall not be required to
file, cause to become effective or maintain the
effectiveness of any registration statement that
contemplates a distribution of securities on a delayed
or continuous basis pursuant to Rule 415 under the
Securities Act.
(b) Prepare and file with the Commission such amendments and
supplements to such registration statement and the
prospectus used in connection with such registration
statements as may be necessary to comply with the
provisions of the Securities Act with respect to the
disposition of all securities covered by such
registration statement for a period of up to one hundred
twenty (120) days;
(c) Promptly notify each Holder of Registrable Securities
covered by the registration statement at any time when
the Company becomes aware of the happening of any event
as a result of which the registration statement or the
prospectus included in such registration statement or
any supplement to the prospectus (as then in effect)
contains any untrue statement of a material fact or
omits to state a material fact necessary to make the
statements therein (in the case of the prospectus, in
light of the circumstances under which they were made)
not misleading or, if for any other reason it shall be
necessary during such time period to amend or supplement
the registration statement or the prospectus in order to
comply with the Securities Act, whereupon, in either
case, each Holder shall immediately cease to use such
registration statement or prospectus for any purpose
and, as promptly as practicable thereafter, the Company
shall prepare and file with the Commission, and furnish
without charge to the appropriate Holders and managing
underwriters, if any, a supplement or amendment to such
registration statement or prospectus which will correct
such statement or omission or effect
- 12 -
such compliance and such copies thereof as the Holders
and any underwriters may reasonably request;
(d) Use its best efforts to register and qualify the
securities covered by such registration statement under
such other securities or Blue Sky laws of such
jurisdictions as shall be reasonably requested by the
Holders, provided that the Company shall not be required
in connection therewith or as a condition thereto to
qualify to do business or to file a general consent to
service of process in any such states or jurisdictions
except as may be required by law;
(e) Cause all such Registrable Securities to be listed on
each securities exchange on which similar securities
issued by the Company are then listed;
(f) Provide a transfer agent and registrar for all
Registrable Securities and a CUSIP number for all such
Registrable Securities, in each case not later than the
effective date of such registration;
(g) In the event of any underwritten public offering, enter
into and perform its obligations under an underwriting
agreement, in usual and customary form, with the
managing underwriter of such offering. Each Holder
participating in such underwriting shall also enter into
and perform its obligations under such an agreement; and
(h) Use its best efforts to furnish, at the request of any
Holder requesting registration of Registrable Securities
pursuant to this Section 3, on the date that such
Registrable Securities are delivered to the underwriters
for sale in connection with a registration pursuant to
this Section 3, if such securities are being sold
through underwriters, or, if such securities are not
being sold through underwriters, on the date that the
registration statement with respect to such securities
becomes effective, (i) an opinion, dated such date, of
the counsel representing the Company for the purposes of
such registration, in form and substance as is
customarily given to underwriters in an underwritten
public offering, addressed to the underwriters, if any,
and to the Holders requesting registration of
Registrable Securities and (ii) a letter dated such
date, from the independent certified public accountants
of the Company, in form and substance as is customarily
given by independent certified public accountants to
underwriters in an underwritten public offering,
addressed to the underwriters, if any, and to the
Holders requesting registration of Registrable
Securities (to the extent the then applicable standards
of professional conduct permit said letter to be
addressed to the Holders).
3.5 Information Furnished by Holder. It shall be a condition precedent of
the Company's obligations under this Agreement that each Holder of Registrable
Securities included in any Registration furnish to the Company such information
regarding such Holder and the distribution proposed by such Holder or Holders as
the Company may reasonably request.
3.6 Indemnification.
3.6.1. Company's Indemnification of Holders. To the extent permitted
by law, the Company will indemnify each Holder, each of its officers, directors
and constituent partners, legal counsel for the Holders, and each person
controlling such Holder, with respect to which Registration, qualification or
compliance of Registrable Securities has been effected pursuant to this
Agreement, and
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each underwriter, if any, and each person who controls any underwriter, against
all claims, losses, damages or liabilities (or actions in respect thereof) to
the extent such claims, losses, damages or liabilities arise out of or are based
upon any untrue statement (or alleged untrue statement) of a material fact
contained in any prospectus or other document (including any related
Registration Statement) incident to any such Registration, qualification or
compliance, or are based on any omission (or alleged omission) to state therein
a material fact required to be stated therein or necessary to make the
statements therein not misleading, or any violation by the Company of any rule
or regulation promulgated under the Securities Act or Exchange Act or state or
federal law applicable to the Company and relating to action or inaction
required of the Company in connection with any such Registration, qualification
or compliance; and the Company will reimburse each such Holder, each such
underwriter and each person who controls any such Holder or underwriter for any
legal and any other expenses reasonably incurred in connection with
investigating or defending any such claim, loss, damage, liability or action;
provided, however, that the indemnity contained in this Section 3.6.1 shall not
apply to amounts paid in settlement of any such claim, loss, damage, liability
or action if settlement is effected without the consent of the Company (which
consent shall not unreasonably be withheld); and provided, further, that the
Company will not be liable in any such case to the extent that any such claim,
loss, damage, liability or expense arises out of or is based upon any untrue
statement or omission based upon written information furnished to the Company by
such Holder, underwriter, or controlling person and stated to be for use in
connection with the offering of securities of the Company.
3.6.2. Holder's Indemnification of Company. To the extent permitted
by law, each Holder will, if Registrable Securities held by such Holder are
included in the securities as to which such Registration, qualification or
compliance is being effected pursuant to this Agreement, indemnify the Company,
each of its directors and officers that has signed the registration statement,
each underwriter, if any, of the Company's securities covered by such a
Registration Statement, each person who controls the Company or such underwriter
within the meaning of the Securities Act, and each other such Holder, each of
its officers, directors and constituent partners and each person controlling
such other Holder, against all claims, losses, damages and liabilities (or
actions in respect thereof) arising out of or based upon any untrue statement
(or alleged untrue statement) of a material fact contained in any such
Registration Statement, prospectus, offering circular or other document, or any
omission (or alleged omission) to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, or
any violation by such Holder of any rule or regulation promulgated under the
Securities Act or Exchange Act or state or federal law applicable to such Holder
and relating to action or inaction required of such Holder in connection with
any such Registration, qualification or compliance; and will reimburse the
Company, such Holders, such directors, officers, partners, persons, underwriters
or control persons for any legal and any other expenses reasonably incurred in
connection with investigating or defending any such claim, loss, damage,
liability or action, in each case to the extent, but only to the extent, that
such untrue statement (or alleged untrue statement) or omission (or alleged
omission) is made in such Registration Statement, prospectus, offering circular
or other document in reliance upon and in conformity with written information
furnished to the Company by such Holder and stated to be specifically for use in
connection with the offering of securities of the Company, provided, however,
that each Holder's liability under this Section 3.6.2 shall be several, and not
joint with other Holders, and shall not exceed such Holder's net proceeds from
the offering of securities made in connection with such Registration.
3.6.3. Indemnification Procedure. Promptly after receipt by an
indemnified party under this Section 3.6 of notice of the commencement of any
action, such indemnified party will, if a claim in respect thereof is to be made
against an indemnifying party under this Section 3.6, notify the indemnifying
party in writing of the commencement thereof and generally summarize such
action. The indemnifying party shall have the right to participate in and to
assume the defense of such claim; provided, however, that the indemnifying party
shall be entitled to select counsel for the defense of such claim with the
approval of any parties entitled to indemnification, which approval shall not be
- 14 -
unreasonably withheld; provided further, however, that if either party
reasonably determines that there may be a conflict between the position of the
indemnifying party and the indemnified party in conducting the defense of such
action, suit or proceeding by reason of recognized claims for indemnity under
this Section 3.6, then counsel for such party shall be entitled to conduct the
defense to the extent reasonably determined by such counsel to be necessary to
protect the interest of such party. The failure to notify an indemnifying party
promptly of the commencement of any such action, if prejudicial to the ability
of the indemnifying party to defend such action, shall relieve such indemnifying
party, to the extent so prejudiced, of any liability to the indemnified party
under this Section 3.6, but the omission so to notify the indemnifying party
will not relieve such party of any liability that such party may have to any
indemnified party otherwise other than under this Section 3.6.
3.6.4. Contribution. If the indemnification provided for in this
Section 3.6 is held by a court of competent jurisdiction to be unavailable to an
indemnified party with respect to any loss, liability, claim, damage or expense
referred to therein, then the indemnifying party, in lieu of indemnifying such
indemnified party hereunder, shall contribute to the amount paid or payable by
such indemnified party as a result of such loss, liability, claim, damage or
expense in such proportion as is appropriate to reflect the relative fault of
the indemnifying party on the one hand and of the indemnified party on the other
in connection with the statements or omissions that resulted in such loss,
liability, claim, damage or expense as well as any other relevant equitable
considerations; provided that, in no event shall any contribution by a Holder
under this Subsection 3.6 exceed the net proceeds from the offering received by
such Holder. The relative fault of the indemnifying party and of the indemnified
party shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission to state a
material fact relates to information supplied by the indemnifying party or by
the indemnified party and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
3.6.5. Underwriting Agreement. Notwithstanding the foregoing, to the
extent that the provisions on indemnification and contribution contained in the
underwriting agreement entered into in connection with the underwritten public
offering are in conflict with the foregoing provisions, the provisions in the
underwriting agreement shall control.
3.6.6. Survival. The obligations of the Company and Holders under
this Section 3.6 shall survive the completion of any offering of Registrable
Securities in a registration statement under this Section 3, and otherwise. No
indemnifying party, in defense of any claim of litigation set forth under this
Section 3.6, shall, except with the consent of each indemnified party, consent
to entry of any judgment or enter into any settlement that does not include as
an unconditional term thereof the giving by the claimant or plaintiff to such
indemnified party of a release from all liability in respect to such claim or
litigation.
3.7 Limitations on Registration Rights Granted to Other Securities. From
and after the date of this Agreement, the Company shall not enter into any other
agreement with any holder or prospective holder of any securities of the Company
providing for the granting to such holder of any information or Registration
rights, except that, with the consent of the Holders of a majority of the
Convertible Securities then outstanding, additional holders may be added as
parties to this Agreement with regard to any or all securities of the Company
held by them. Any such additional parties shall execute a counterpart of this
Agreement, and upon execution by such additional parties and by the Company,
shall be considered an Investor for all purposes of this Agreement. The
additional parties and the additional Registrable Securities shall be identified
in an amendment to Schedule A hereto.
3.8 Transfer of Rights. The rights to information under Section 2 and the
right to cause the Company to Register securities granted by the Company to the
Investors under Sections 3.1 and 3.2 may be assigned by any Holder to a
transferee or assignee of any Convertible Securities not sold to the public
acquiring at least One Hundred Fifty Thousand (150,000) shares of such Holder's
Convertible Securities
- 15 -
(equitably adjusted for all stock splits, subdivisions, stock dividends,
combinations and the like); provided, however, that (i) the Company must receive
written notice prior to the time of said transfer, stating the name and address
of said transferee or assignee and identifying the securities with respect to
which such rights are being assigned, and (ii) with respect to the rights to
information and inspection under Section 2, the transferee or assignee of such
rights must not be a person deemed by the Board, in its best judgment, to be a
competitor or potential competitor of the Company. Notwithstanding the
limitation set forth in the foregoing sentence respecting the minimum number of
shares which must be transferred, (a) any Holder which is a partnership may
transfer such Holder's rights to such Holder's constituent partners, limited
partners, retired partners (including spouses, ancestors, lineal descendants and
siblings of such partners or spouses who acquire Convertible Securities or
Registrable Securities by gift, will or intestate succession), (b) any Holder
which is a natural person may transfer such Holder's rights to any immediate
family member, niece or nephew or to any trust created for the benefit of such
Holder or his or her immediate family members, nieces or nephews, and (c) any
Holder may transfer such Holder's rights to an Affiliate, subject in each case
to such transferee's agreeing to be bound by the rights and restrictions of this
Agreement. The rights under Sections 4 and 5 may be assigned by an Investor only
as provided in such Sections.
3.9 Market Stand-off. If requested in writing by the underwriters for the
initial public offering of the Company's Common Stock, each holder of
Registrable Securities who is a party to this Agreement shall agree not to sell
publicly any shares of Registrable Securities or any other securities of the
Company (other than shares of Registrable Securities or other securities of the
Company being registered in such offering), without the consent of such
underwriters, for a period of not more than one hundred eighty (180 days)
following the effective date of the registration statement relating to such
offering; provided, however, that the Company shall use commercially reasonable
efforts to convince such managing underwriters to allow for alternative means of
liquidity for the holders if, in the opinion of such managing underwriters, such
liquidity can be provided without an adverse impact on such initial public
offering; and, provided, further, however, that all persons entitled to
registration rights with respect to shares of Common Stock who are not parties
to this Agreement, all other persons selling shares of Common Stock in such
offering and all executive officers and directors of the Company and holders of
at least one percent (1%) of the Company's voting securities shall also have
agreed not to sell publicly their Common Stock under the circumstances and
pursuant to the terms set forth in this section. Each Holder agrees to execute
and deliver such other agreements as may be reasonably requested by the Company,
or the Company's underwriters, which are consistent with the foregoing, or which
are reasonably necessary to give further effect thereto.
3.10 No-Action Letter or Opinion of Counsel in Lieu of Registration;
Conversion of Convertible Securities. Notwithstanding anything else in this
Agreement, if the Company shall have obtained from the Commission a "no-action"
letter in which the Commission has indicated that it will take no action if,
without Registration under the Securities Act, any Holder disposes of
Registrable Securities covered by any request for Registration made under this
Agreement in the specific manner in which such Holder proposes to dispose of the
Registrable Securities included in such request (such as including, without
limitation, the inclusion of such Registrable Securities in an underwriting
initiated by either the Company or the Holders), or if in the opinion of counsel
for the Company concurred in by counsel for such Holder, which concurrence shall
not be unreasonably withheld, no Registration under the Securities Act is
required in connection with such disposition, the shares included in such
request shall not be eligible for Registration under this Agreement; provided,
however, that any Registrable Securities not so disposed of shall be eligible
for Registration in accordance with the terms of this Agreement with respect to
other proposed dispositions to which this Section 3.10 does not apply. The
Registration rights of the Holders of Convertible Securities set forth in this
Agreement are conditioned upon the conversion of the Convertible Securities with
respect to which Registration is sought into Common Stock prior to the effective
date of the Registration Statement.
- 16 -
3.11 Sale of Convertible Securities to Underwriter. Notwithstanding any
provision in this Agreement to the contrary, in lieu of converting any
Convertible Securities prior to the filing of any Registration Statement filed
pursuant to this Agreement, the holder of such Convertible Securities may sell
such Convertible Securities to the underwriters of the offering being Registered
upon the undertaking of such underwriters to convert the Convertible Securities
on or prior to the closing date of the offering. If and when the Convertible
Securities are converted in accordance with their applicable terms and
conditions, the Company agrees to cause the Common Stock issuable on the
conversion of the Convertible Securities to be issued within such time period as
will permit the underwriters to make and complete the distribution contemplated
by the underwriting.
3.12 Rule 144 Requirements. Immediately after the date on which a
Registration Statement filed by the Company under the Securities Act becomes
effective, the Company shall undertake to make publicly available, and available
to the Holders of Registrable Securities, such information as is necessary to
enable the holders of Registrable Securities to make sales of Registrable
Securities pursuant to Rule 144 of the Commission under the Securities Act. The
Company shall furnish to any holder of Registrable Securities, upon request, a
written statement executed by the Company as to the steps it has taken to comply
with the current public information requirements of Rule 144.
3.13 Termination of Company Agreements. The Registration rights set forth
in Sections 3.1 and 3.2 shall terminate seven (7) years after the effective date
of the Company's Registration Statement filed in connection with the Company's
first Qualified Public Offering or, as to any Holder, at any time following the
effective date of the Company's first Qualified Public Offering, when such
Holder is entitled to sell all of such Investor's Registrable Securities
pursuant to Rule 144 (including Rule 144(k)) of the Commission under the
Securities Act.
SECTION 4. RIGHT OF FIRST REFUSAL; RIGHT TO PURCHASE SHARES
4.1 Right of First Refusal.
4.1.1. Generally. The Company hereby grants to each Investor the
right of first refusal to purchase such Investor's pro rata share of New
Securities (as defined below) which the Company may from time to time propose to
sell and issue (the "RIGHT OF FIRST REFUSAL"). For purposes of the Right of
First Refusal an Investor's pro rata share (the "ROFR PRO RATA SHARE") shall be
determined as follows: an Investor's pro rata share shall be equal to that
number or amount of New Securities to be sold multiplied by a fraction, the
numerator of which shall be the number of shares of Common Stock owned by such
Investors (including shares of Common Stock issuable upon the conversion of all
Convertible Securities and the exercise of all options and warrants owned by
such Investor) and the denominator of which shall be the total number of shares
of the Company's Common Stock deemed to be outstanding assuming the conversion
of all outstanding convertible securities and the exercise of all outstanding
options and warrants. Notwithstanding the foregoing, any Investor may, at the
time it accepts the Company's offer, subscribe to purchase any or all of the
securities offered ("OVERSUBSCRIPTION SECURITIES") which may be available as a
result of the rejection, or partial rejection, of the offer by other Investors.
All such Oversubscription Securities shall be allocated on a pro rata basis
among those Investors subscribing to purchase them. Notwithstanding the
foregoing, the Company shall not be required to offer or sell such New
Securities to any Investor who would cause the Company to be in violation of
applicable federal securities laws by virtue of such offer or sale. The Right of
First Refusal shall be subject to the following provisions:
4.1.2. Definition of New Securities. "NEW SECURITIES" shall mean any
shares of Common Stock or Preferred Stock of the Company, whether now authorized
or not, and rights, options, or warrants to purchase such shares of Common Stock
or Convertible Securities, and all other securities
- 17 -
having equity features, such as convertible notes or notes issued in conjunction
with options or warrants; provided that "NEW SECURITIES" shall not include:
(a) securities issued upon the conversion of any shares of the
Convertible Securities;
(b) securities issued to the Company's employees or officers or
directors or outside consultants or contractors pursuant to a
plan, agreement or arrangement duly approved by the Board,
including the approval of at least two (2) of the Preferred
Directors;
(c) securities issued or issuable pursuant to the exercise of
options, warrants or convertible securities outstanding as of
the date hereof;
(d) securities issued in connection with obtaining lease
financing, whether issued to a lessor, guarantor or other
person, provided that such issuance is pursuant to an
agreement or arrangement duly approved by the Board, including
the approval of at least two (2) of the Preferred Directors;
(e) securities issued to effect any stock split, stock dividend or
recapitalization of the Company;
(f) securities issued in connection with any borrowings, direct or
indirect, from financial institutions or other persons by the
Company, provided that such issuance is pursuant to an
agreement or arrangement duly approved by the Board, including
the approval of at least two (2) of the Preferred Directors;
(g) securities issued in connection with the acquisition of all or
a substantial portion of the assets or the business of another
entity by the Company, provided that such issuance is pursuant
to an agreement or arrangement duly approved by the Board,
including the approval of at least two (2) of the Preferred
Directors;
(h) securities issued in connection with a corporate partnering
transaction, strategic alliance, technology acquisition or
transfer, or similar transaction, provided that such issuance
is pursuant to an agreement or arrangement duly approved by
the Board, including the approval of at least two (2) of the
Preferred Directors;
(i) securities issued pursuant to a Qualified Public Offering;
(j) securities issued under Section 1.2 or Section 1.3 of the
Purchase Agreement at the Second Closing or the Series C-1
Closing (as such terms are defined in the Purchase Agreement);
and
(k) any right, option or warrant to acquire any security
convertible into the securities excluded from the definition
of New Securities pursuant to subsections (a) through (j)
above.
4.1.3. Notices. In the event the Company proposes to undertake an
issuance of New Securities, it shall give each Investor written notice (the
"NOTICE") of its intention, describing the type of New Securities, the price,
and the principal terms upon which the Company proposes to issue the same. Each
Investor shall have twenty (20) days from the delivery of the Notice to agree to
purchase up to the Investor's ROFR Pro Rata Share plus any Oversubscription
Securities for the price and upon the terms
- 18 -
specified in the Notice by giving written notice to the Company and stating
therein the quantity of New Securities and Oversubscription Securities to be
purchased.
4.1.4. Failure to Exercise Right. In the event an Investor does not
elect to purchase all of such Investor's ROFR Pro Rata Share of the New
Securities pursuant to Section 4.1.1 and such New Securities are not purchased
by other Investors, the Company shall have ninety (90) days after the last date
on which any Investor's right to purchase lapsed to sell or enter into an
agreement (pursuant to which the sale of New Securities covered thereby shall be
closed, if at all, within ninety (90) days from the date of said agreement) to
sell the New Securities respecting which such Investor's option was not
exercised, at or above the price and upon terms not materially more favorable to
the purchasers of such securities than the terms specified in the initial Notice
given in connection with such sale. In the event the Company has not sold the
New Securities within said 90-day period (or sold and issued New Securities in
accordance with the foregoing within ninety (90) days from the date of said
agreement), the Company shall not thereafter issue or sell any New Securities
without first offering such New Securities to the Investors in the manner
provided in this Section 4.1.
4.2 Right to Purchase in Connection with Initial Public Offering.
4.2.1. Generally. Subject to (i) the approval of the underwriter
selected to run the books of the Company's initial Qualified Public Offering,
and (ii) the Commission, the National Association of Securities Dealers, Inc.
(the "NASD") or any other regulatory authority in effect at the time of the
initial Qualified Public Offering not requiring otherwise or imposing any
requirements that the Company reasonably determines to be unduly burdensome, the
Company will use its commercially reasonable efforts to (A) establish a directed
share program covering five percent (5%) of the shares sold in the Qualified
Public Offering (or such lesser percentage as may be required by the NASD and
applicable regulatory authorities)(excluding any shares sold upon exercise of
the underwriters' overallotment option), of which fifty percent (50%) shall be
allocated to the Major Investors (the "DIRECTED Shares"); and (B) provide to
each Major Investor the opportunity to purchase from the underwriters, at the
initial offering price paid by the public to the underwriters (the "OFFERING
PRICE"), such Major Investor's IPO Pro Rata Share of the Directed Shares. For
the purposes of this Section 4.2, a Major Investor's pro rata share (the "IPO
PRO RATA SHARE") shall be determined as follows: a Major Investor's IPO Pro Rata
Share shall be equal to that number of Directed Shares to be sold multiplied by
a fraction, the numerator of which shall be the number of shares of Common Stock
owned by such Major Investor (including shares of Common Stock issuable upon the
conversion of all Convertible Securities and the exercise of all options and
warrants owned by such Major Investor) and the denominator of which shall be the
total number of shares of the Company's Common Stock owned by all Major
Investors (including shares of Common Stock issuable upon the conversion of all
Convertible Securities and the exercise of all options and warrants owned by all
Major Investors). In no event shall the rights and obligations of the parties in
this Section 4.2 apply if the initial Qualified Public Offering occurs within
one (1) year of the date of this Agreement.
4.2.2. Cutback. All Directed Shares sold to Major Investors pursuant
to this Section 4.2 shall be included in the Registration Statement. However,
the number of Directed Shares may be partially or completely cutback to the
extent deemed necessary to the success of the Qualified Public Offering by the
managing underwriter, in its sole discretion. If the number of Qualified Public
Offering Shares is partially cutback by the managing underwriter, each Major
Investor shall be entitled to purchase its IPO Pro Rata Share of such number of
Directed Shares which remain available following the cutback.
4.2.3. Notices. The Company shall give notice of the Qualified
Public Offering to all Major Investors within fifteen (15) days of the filing of
the Registration Statement that includes the proposed price range and the
proposed number of shares to be offered. Within seven (7) days after the giving
of such notice by the Company, each Major Investor which may desire to purchase
any Directed
- 19 -
Shares pursuant to this Section 4.2 must deliver to the underwriter identified
in the Company's notice an indication of interest stating the number of Directed
Shares that such Major Investor may elect to purchase. Such indication of
interest shall not be legally binding, but if not withdrawn prior to the
Offering Commencement (as defined below) shall become at such time an acceptance
by the Major Investor of the Company's offer to sell (through the underwriters)
the number of Directed Shares stated in the indication of interest and thereupon
shall be binding on such Major Investor. The "OFFERING COMMENCEMENT" means the
later of (i) the time at which the Registration Statement becomes effective and
(ii) two hours after notification to the Major Investor of the determination of
the Offering Price by the Company and the underwriters by telephone, email or
telecopy.
4.2.4. Market Standoff. Each Major Investor agrees to comply with
the market stand-off provisions set forth in Section 3.9 with respect to any
Directed Shares purchased by such Major Investor.
4.2.5. Private Placement. Subject to Section 4.2.6 below, if the
rights provided to the Major Investors above shall not be enforceable by them
for any reason, then the Major Investors shall have the opportunity to purchase,
and the Company hereby agrees to use its commercially reasonable efforts to
sell, the number of shares of common stock that such Major Investor would have
otherwise been able to purchase in Section 4.2.1 above which shall close
immediately prior to the consummation of the Qualified Public Offering at the
Offering Price less a reasonable illiquidity discount to be determined by the
parties in good faith, the percentage of which discount shall not exceed the
percentage underwriters' discount for the Qualified Public Offering. The Company
shall take all commercially reasonable actions and execute and file all
documents and instruments reasonably necessary to effectuate the private
placement. The securities issued to the Major Investors in such private
placement shall be deemed to be Registrable Securities and shall be subject to
the rights and obligations provided to such securities herein.
4.2.6. Enforceability. Notwithstanding anything herein to the
contrary, the rights provided to the Major Investors pursuant to this Section
4.2 shall not be enforceable by them (a) to the extent they are found to be
materially inconsistent with the regulations and policies of the Commission, the
NASD or other regulatory authority as in effect at the time of the Qualified
Public Offering, (b) to the extent they would on the basis of Commission staff
comments prevent the Registration Statement from being declared effective, (c)
to the extent the managing underwriters determine that the exercise of such
rights could materially adversely affect the offering price in the Qualified
Public Offering or (d) if inclusion of the Directed Shares or the consummation
of such concurrent private offering could have the effect of causing the
Qualified Public Offering to fail to constitute a bona fide good faith public
distribution of the shares to be sold in the Qualified Public Offering.
4.2.7. Not an Offer to Sell. The foregoing provisions are not
intended to be, and shall not be construed as, an offer by the Company to sell
the Directed Shares. Any such offer will be made pursuant to the applicable
requirements of the federal securities laws, the rules and regulations of the
Commission and the NASD, and all other applicable laws, rules and regulations,
as well as the provisions of this Section 4.2.
4.3 Rights of Affiliated Investors. For the purposes of this Section 4,
Investors who are Affiliates of one or more other Investors shall, at the
election of an Investor and one or more such Affiliates, be treated as a group
(an "INVESTOR GROUP"). Members of an Investor Group shall have the right to
reallocate the rights granted by this Section 4 among themselves as they
determine.
4.4 Assignment. The rights set forth in this Section 4 may not be assigned
or transferred, except that each Investor shall have the right to assign its
right to purchase securities under this Section 4 to any Affiliate of such
Investor; provided such Affiliate agrees in writing with the Company and the
- 20 -
Investors, prior to and as a condition precedent to such transfer, to be bound
by all the provisions of Sections 3.9, 5 and 6 of this Agreement.
4.5 Termination. The rights granted under this Section 4 shall not apply
to, and shall terminate on and be of no further force or effect upon the
effective date of the Company's registration statement filed in connection with
the Company's first Qualified Public Offering.
SECTION 5. TRANSFERS OF SECURITIES BY INVESTORS.
5.1 Notices. If any Investor (the "TRANSFEROR") proposes to sell, assign,
hypothecate or otherwise transfer (a "TRANSFER") any securities of the Company
owned by such Investor from and after the date of this Agreement, other than
pursuant to the provisions of Section 5.6 of this Agreement, the Transferor
shall first give each of the other Investors the right to purchase such
securities by delivering to them a written offer which shall state the price and
other terms and conditions of the proposed Transfer. If the Transferor proposes
to Transfer the securities for consideration other than solely cash and/or
promissory notes, the offer to the Investors shall, to the extent of such
consideration, permit each Investor to pay in lieu thereof, cash equal to the
fair market value of such consideration, and the offer shall state the estimate
of such fair market value as determined by the Board. The Transferor shall fix
the period of the offer which shall be a minimum of thirty (30) days or such
longer period as is necessary to determine the fair market value of the
consideration referred to in the preceding sentence.
5.2 Acceptance of Offer. An Investor may accept an offer ("PURCHASING
INVESTOR") only by giving written notice to the Transferor before the offer
expires that such Purchasing Investor has accepted the offer to purchase some or
all of the securities offered (the "ACCEPTED SECURITIES"); provided, however,
that the maximum number or amount of securities a Purchasing Investor shall be
entitled to purchase shall be equal to that number or amount of securities to be
transferred multiplied by a fraction, the numerator of which shall be the number
of shares of Common Stock owned by such Purchasing Investor (including shares of
Common Stock issuable upon the conversion of all Convertible Securities and the
exercise of all options and warrants owned by such Investor) and the denominator
of which shall be the aggregate number of shares of Common Stock held by all
Investors (including shares of Common Stock issuable upon the conversion of all
Convertible Securities and the exercise of all options and warrants owned by all
Investors), excluding the Transferor's shares of Common Stock. Notwithstanding
the foregoing, any Purchasing Investor may, at the time it accepts the offer,
subscribe to purchase any or all securities offered which may be available as a
result of the rejection, or partial rejection, of the offer by other Investors,
which securities shall be allocated on a pro rata basis among those Purchasing
Investors subscribing to purchase them.
5.3 Allocation of Securities and Payment. Promptly following the
expiration of an offer, the Transferor shall allocate the securities subscribed
for among the Purchasing Investors accepting or partially accepting the offer,
pro rata, based upon their respective holdings as aforesaid, and shall by
written notice (the "ACCEPTANCE NOTICE") advise all Purchasing Investors of the
number or amount of securities allocated to each of the Purchasing Investors.
Within ten (10) days following receipt of the Acceptance Notice, each of the
Purchasing Investors shall deliver to the Transferor payment in full for the
Accepted Shares purchased by it against delivery by the Transferor to each
Purchasing Investor of a certificate or certificates evidencing the Accepted
Securities purchased by it.
5.4 Failure to Exercise. To the extent an offer pursuant to Section 5.1 is
not accepted by the other Investors, the Transferor may, for a period of ninety
(90) days thereafter, transfer the unaccepted securities, or any of them, at or
above the price, and upon the other terms and conditions specified in such
offer, to any Person or Persons; provided that such Person or Persons agrees in
writing with the Company and the Investors, prior to and as a condition
precedent to such Transfer, to be bound by all of the provisions of Sections
3.9, 5 and 6 of this Agreement.
- 21 -
5.5 Assignment. The right of first refusal set forth in this Section 5 may
not be assigned or transferred, except that each Investor shall have the right
to assign its rights to purchase such securities under this Section 5 to any
Affiliate of such Investor; provided such Affiliate agrees in writing with the
Company and the Investors, prior to and as a condition precedent to such
assignment, to be bound by all of the provisions of Sections 3.9, 5 and 6 of
this Agreement.
5.6 Permitted Transfers.
(a) Notwithstanding anything to the contrary contained herein, any
Investor which is a partnership may transfer, without first
offering any securities of the Company to any other Investor,
all or any of its securities to any of its Affiliates or
successor funds or to a partner, limited partner or retired
partner of such partnership or to the estate of any such
partner or transfer by will or intestate succession to his
spouse or to the siblings, lineal descendants or ancestors of
such partner or his spouse; provided such transferee agrees in
writing with the Company and the Investors, prior to and as a
condition precedent to such Transfer, to be bound by all of
the provisions of Sections 3.9, 5 and 6 of this Agreement.
(b) Notwithstanding anything to the contrary contained herein, any
Investor which is a corporation may Transfer, without first
offering any securities of the Company to any other Investor,
all or any of its securities to any of its Affiliates,
provided such Affiliate agrees in writing with the Company and
the Investors, prior to and as a condition precedent to such
Transfer, to be bound by all of the provisions of Sections
3.9, 5 and 6 of this Agreement.
(c) Notwithstanding anything to the contrary contained herein, any
Investor who is an individual may Transfer, without first
offering any securities of the Company to any other Investor,
all or any of his or her securities to his or her spouse or
their spouse's siblings, lineal descendants or ancestors,
nieces or nephews, or any entity that is an Affiliate of such
Investor; provided such transferee agrees in writing with the
Company and the Investors, prior to and as a condition
precedent to such Transfer, to be bound by all of the
provisions of Sections 3.9, 5 and 6 of this Agreement.
5.7 Termination. The right of first refusal granted under this Section 5
shall expire upon the effective date of the Company's registration statement
filed in connection with the Company's first Qualified Public Offering and shall
not be applicable to any shares sold pursuant thereto.
SECTION 6. MISCELLANEOUS.
6.1 Entire Agreement; Successors and Assigns. This Agreement constitutes
the entire contract between the Company and the Investors relative to the
subject matter hereof. Any previous agreement between the Company, the Investors
and the Holders concerning Registration rights, including, without limitation,
the Prior Rights Agreement, is superseded by this Agreement. Subject to the
exceptions specifically set forth in this Agreement, the terms and conditions of
this Agreement shall inure to the benefit of and be binding upon the respective
executors, administrators, heirs, successors and assigns of the parties.
6.2 Aggregation of Stock. All Convertible Securities and Registrable
Securities held or acquired by affiliated entities or persons shall be aggregate
together for the purpose of determining the availability of any rights under
this Agreement.
- 22 -
6.3 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA APPLICABLE TO CONTRACTS
ENTERED INTO AND WHOLLY TO BE PERFORMED WITHIN THE STATE OF CALIFORNIA BY
CALIFORNIA RESIDENTS.
6.4 Counterparts. This Agreement may be executed in two (2) or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
6.5 Headings. The headings of the Sections of this Agreement are for
convenience and shall not by themselves determine the interpretation of this
Agreement.
6.6 Notices. Any notice required or permitted hereunder shall be given in
writing and shall be conclusively deemed effectively given upon personal
delivery, or five (5) days after deposit in the United States mail, by
registered or certified mail (or airmail, if notice shall be sent outside the
United States), postage prepaid, or two (2) days after delivery to a nationally
known air courier company, addressed (i) if to the Company, to the Company's
address as set forth below the Company's name on the signature page of this
Agreement and (ii) if to an Investor, to such Investor's address as set forth on
the signature page of this Agreement, or at such other address as the Company or
such Investor may designate by ten (10) days, advance written notice to the
other parties hereto. Any notice sent outside the United States shall also be
telexed or telecopied.
6.7 Amendment of Agreement; Waivers. Subject to Section 3.7, any provision
of this Agreement may be amended or waived by a written instrument signed by the
Company and by Persons holding at least two-thirds (2/3) in interest of the
Convertible Securities. Any amendment or waiver effected in accordance with
Section 3.7 or this Section 6.7 shall be binding upon the Company and all
Holders and each of their respective successors and assigns.
6.8 Amendment and Termination of Prior Rights Agreement. The Prior Rights
Agreement is hereby amended in its entirety and restated herein. Such amendment
and restatement is effective upon the execution of this Agreement by the Company
and Persons holding at least a majority of the "Convertible Securities" under
the Prior Rights Agreement. Upon such execution, all provisions of, rights
granted and covenants made in the Prior Rights Agreement (including, without
limitation, the rights of first refusal set forth in Section 4 of the Prior
Rights Agreement) are hereby waived, released and terminated in their entirety
and shall have no further force and effect (including, without limitation, with
respect to the Series C Preferred Stock or Series C-1 Preferred Stock issued
pursuant to the Purchase Agreement).
6.9 Additional Investors. Notwithstanding anything to the contrary
contained herein, if the Company shall issue additional shares of its Series C
Preferred Stock or Series C-1 Preferred Stock pursuant to the Purchase
Agreement, any purchaser of such shares of Series C Preferred Stock or Series
C-1 Preferred Stock shall become a party to this Agreement by executing and
delivering an additional counterpart signature page to this Agreement and shall
be deemed an "Investor" hereunder and Schedule A shall be amended accordingly.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
- 23 -
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
COMPANY:
SOMAXON PHARMACEUTICALS, INC.
By: /s/ Xxxxxxx Xxxxx
--------------------------------------
Xxxxxxx Xxxxx,
President and Chief Executive Officer
Address: 00000 Xxxx Xxxxx Xxxxx, Xxxxx 000
Xxx Xxxxx XX 00000
Fax No.: (000) 000-0000
SOMAXON PHARMACEUTICALS, INC.
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
COUNTERPART SIGNATURE PAGE
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
INVESTORS:
MPM BIOVENTURES III, L.P.
By: MPM BIOVENTURES III GP. L.P.,
its General Partner
By: MPM BIOVENTURES III LLC,
its General Partner
By: /s/ [Illegible]
--------------------------------------
Name:
Title: Series A Member
MPM BIOVENTURES III - QP, L.P.
By: MPM BIOVENTURES III GP, L.P.,
its General Partner
By: MPM BIOVENTURES III LLC,
its General Partner
By: /s/ [Illegible]
--------------------------------------
Name:
Title: Series A Member
MPM BIOVENTURES III GMBH & CO.
BETEILIGUNGS KG
By: MPM BIOVENTURES III GP, L.P.,
in its capacity as the
Managing Limited Partner
By: MPM BIOVENTURES III LLC,
its General Partner
By: /s/ [Illegible]
--------------------------------------
Name:
Title: Series A Member
Address: c/o MPM Capital
000 Xxxxxxx Xxxx., Xxxxx 000
Xxxxx Xxx Xxxxxxxxx, XX 00000
SOMAXON PHARMACEUTICALS, INC.
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
COUNTERPART SIGNATURE PAGE
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
INVESTORS:
MPM BIOVENTURES III PARALLEL FUND, L.P.
By: MPM BIOVENTURES III GP, L.P.,
its General Partner
By: MPM BIOVENTURES III LLC,
its General Partner
By: /s/ [Illegible]
--------------------------------------
Name:
Title: Series A Member
MPM ASSET MANAGEMENT INVESTORS 2005
BVIII LLC
By: /s/ [Illegible]
--------------------------------------
Name:
Title: Manager
MPM BIOEQUITIES MASTER FUND, L.P.
By: MPM BioEquities GP, L.P.,
its General Partner
By: MPM BioEquities GP LLC,
its General Partner
By: /s/ Xxxxxx X. Xxxxxx
--------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Manager
Address: c/o MPM Capital
000 Xxxxxxx Xxxx., Xxxxx 000
Xxxxx Xxx Xxxxxxxxx, XX 00000
SOMAXON PHARMACEUTICALS, INC.
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
COUNTERPART SIGNATURE PAGE
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
INVESTORS:
/s/ Xxxxxxx Xxxxx
------------------------------------------
Name: Xxxxxxx Xxxxx
Address: X.X. Xxx 0000
Xxxxxx Xxxxx Xx, Xxxxxxxxxx 00000
Fax No.:
-------------------------
SOMAXON PHARMACEUTICALS, INC.
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
COUNTERPART SIGNATURE PAGE
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
INVESTORS:
PROSPECT VENTURE PARTNERS III, LP
By: /s/ Xxxxx X. Xxxxxxx, M.D.
By: Prospect Management Co. III, LLC
--------------------------------------
Name: Xxxxx X. Xxxxxxx, M.D.
--------------------------------------
Title: Managing Member
--------------------------------------
Address: c/o Prospect Venture Partners
000 Xxxxx Xxxxxx, Xxxxx 000
Xxxx Xxxx, XX 00000
SOMAXON PHARMACEUTICALS, INC.
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
COUNTERPART SIGNATURE PAGE
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
INVESTORS:
XXX X. XXXXXXXX TRUST AGREEMENT DATED
OCTOBER 29, 1996
By: /s/ Xxx XxXxxxxx
--------------------------------------
Xxx XxXxxxxx
Trustee
Address: 0000 Xxxxxxx Xxx
Xxxxxxxx, Xxxxxxxxxx 00000
Fax No.: (000) 000-0000
SOMAXON PHARMACEUTICALS, INC.
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
COUNTERPART SIGNATURE PAGE
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
INVESTORS:
VP COMPANY INVESTMENTS 2004, LLC
By: /s/ Xxxx X. Xxxxxxxxx
--------------------------------------
Name: Xxxx X. Xxxxxxxxx
Title: Managing Member
Address: 000 X. Xxxxx Xxxxxx, Xxx. 000
Xxx Xxxxxxx, XX 00000-0000
Attention: Xxxxx Xxxxxxx
Facsimile: (000)000-0000
SOMAXON PHARMACEUTICALS, INC.
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
COUNTERPART SIGNATURE PAGE
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
INVESTORS:
Domain Partners VI, L.P.
By: One Xxxxxx Square Associates VI,
L.L.C., its General Partner
By: /s/ Xxxxxxxx X. Xxxxxxxxxx
--------------------------------------
Xxxxxxxx X. Xxxxxxxxxx
Managing Member
Address: c/o Domain Associates, L.L.C.
Xxx Xxxxxx Xxxxxx
Xxxxxxxxx, Xxx Xxxxxx 00000
Attn: Xxxxx X. Xxxx
Fax No.: (000) 000-0000
With a copy to: Domain Associates, L.L.C.
Xxx Xxxxxx Xxxxxx
Xxxxxxxxx, Xxx Xxxxxx 00000
Attn: Xxxxxxxx X. Xxxxxxxxxx
Fax No.: (000) 000-0000
SOMAXON PHARMACEUTICALS, INC.
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
COUNTERPART SIGNATURE PAGE
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
INVESTORS:
DP VI Associates, L.P.
By: One Xxxxxx Square Associates VI,
L.L.C., its General Partner
By: /s/ Xxxxxxxx X. Xxxxxxxxxx
-------------------------------------
Xxxxxxxx X. Xxxxxxxxxx,
Managing Member
Address: c/o Domain Associates, L.L.C.
Xxx Xxxxxx Xxxxxx
Xxxxxxxxx, Xxx Xxxxxx 00000
Attn: Xxxxx X. Xxxx
Fax No.: (000) 000-0000
With a copy to: Domain Associates, L.L.C.
Xxx Xxxxxx Xxxxxx
Xxxxxxxxx, Xxx Xxxxxx 00000
Attn: Xxxxxxxx X. Xxxxxxxxxx
Fax No.: (000) 000-0000
SOMAXON PHARMACEUTICALS, INC.
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
COUNTERPART SIGNATURE PAGE
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
INVESTORS:
CDIB BIOSCIENCE VENTURES I, INC.
By: /s/ Xxxxx Xx
-----------------------------------------
Xxxxx Xx
Chairman
Address: c/o CDIB BioScience Venture
Management
00xx Xxxxx, 00 Xxx Xxx Xxxxx Xx.
Xxxxxxx 0
Xxxxxx, Xxxxxx
Attn: Xxxxxx Xxxxx
Fax No.: 000-0-00000000
SOMAXON PHARMACEUTICALS, INC.
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
COUNTERPART SIGNATURE PAGE
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
INVESTORS:
FOG CITY FUND LLC
By: FOG CITY MANAGEMENT LLC
Its Managing Member
By: /s/ Xxxxx Xxxxx
---------------------------------------
Xxxxx Xxxxx
Managing Member
Address: 0000 Xxxxx Xxxxxx # 000
Xxx Xxxxxxxxx, XX 00000
Fax No.: (000) 000-0000
SOMAXON PHARMACEUTICALS, INC.
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
COUNTERPART SIGNATURE PAGE
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
INVESTORS:
WINDAMERE III, LLC
By: /s/ Xxxxx X. Xxxxx
---------------------------------------
Xxxxx X. Xxxxx,
Managing Member
Address: c/o Windamere Venture Partners
0000 Xxxxxxx Xxxxx
Xx Xxxxx, XX 00000
Fax No.: (000) 000-0000
SOMAXON PHARMACEUTICALS, INC.
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
COUNTERPART SIGNATURE PAGE
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
as of the day and year first above written.
INVESTORS:
MONTREUX EQUITY PARTNERS II SBIC, LP
By: Montreux Equity Management II SBIC, LLC,
Its General Partner
By: /s/ Xxxxxx X. Xxxxxx, III
---------------------------------------
Xxxxxx X. Xxxxxx, III
Managing Member
Address: 0000 Xxxx Xxxx Xxxx, Xxx. 0 Xxxxx 000
Xxxxx Xxxx, Xxxxxxxxxx 00000
Fax No.: (000) 000-0000
SOMAXON PHARMACEUTICALS, INC.
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
COUNTERPART SIGNATURE PAGE
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
as of the day and year first above written.
INVESTORS:
MONTREUX EQUITY PARTNERS III SBIC, LP
By: Montreux Equity Management III SBIC, LLC,
Its General Partner
By: /s/ Xxxxxx X. Xxxxxx, III
---------------------------------------
Xxxxxx X. Xxxxxx, III
Managing Member
Address: 0000 Xxxx Xxxx Xxxx, Xxx. 0 Xxxxx 000
Xxxxx Xxxx, Xxxxxxxxxx 00000
Fax No.: (000) 000-0000
SOMAXON PHARMACEUTICALS, INC.
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
COUNTERPART SIGNATURE PAGE
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
INVESTORS:
XXXX FAMILY TRUST UTD 2/10/86
By: /s/ Xxxxx X. Xxxx
---------------------------------------
Xxxxx X. Xxxx,
Trustee
Address: P.O. Box 8925
00000 Xxxxx xxx Xxx
Xxxxxx Xxxxx Xx, Xxxxxxxxxx 00000
Fax No.: (000) 000-0000
SOMAXON PHARMACEUTICALS, INC.
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
COUNTERPART SIGNATURE PAGE
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
INVESTORS:
XXXXXX FAMILY TRUST UTD 10/21/87 AS
RESTATED 8/9/01
By: /s/ Cam X. Xxxxxx
---------------------------------------
Cam X. Xxxxxx,
Trustee
Address: 0000 Xxxxxxxxxx Xxxxx
Xxxxxx Xxxxx Xx, XX 00000
Fax No.: (000) 000-0000
SOMAXON PHARMACEUTICALS, INC.
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
COUNTERPART SIGNATURE PAGE
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
INVESTORS:
XXXXXXX X. XXXXX, XX., and
XXXXXXX X. XXXXX TRUST UTD 10/18/01
By: /s/ Xxxxxxx X. Xxxxx
---------------------------------------
Xxxxxxx X. Xxxxx, Xx.,
Trustee
Address: 0000 Xxxxxx Xxxxx Xxxxx
Xxx Xxxxx, Xxxxxxxxxx 00000
Fax No.: (000) 000-0000
SOMAXON PHARMACEUTICALS, INC.
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
COUNTERPART SIGNATURE PAGE
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
INVESTORS:
XXXXXX & XXXXXXX LLP
By: /s/ Xxxxxxxxxxx X. Xxxxxxx
---------------------------------------
Xxxxxxxxxxx X. Xxxxxxx
Address: 000 Xxxxx Xxxxx Xxxxxx, Xxxxx 000
Xxx Xxxxxxx, XX 00000-0000
Fax No.: (000) 000-0000
SOMAXON PHARMACEUTICALS, INC.
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
COUNTERPART SIGNATURE PAGE
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
INVESTORS:
/s/ Xxxxx X. Xxxxx
-------------------------------------------
Xxxxx X. Xxxxx
Address: c/o Latham & Xxxxxxx LLP
00000 Xxxx Xxxxx Xxxxx, Xxxxx 000
Xxx Xxxxx, Xxxxxxxxxx 00000-0000
Fax No.: (000) 000-0000
SOMAXON PHARMACEUTICALS, INC.
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
COUNTERPART SIGNATURE PAGE
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
INVESTORS:
/s/ Xxxxxxx X. Xxxxxx
-------------------------------------------
Xxxxxxx X. Xxxxxx
Address: c/o Latham & Xxxxxxx LLP
00000 Xxxx Xxxxx Xxxxx, Xxxxx 000
Xxx Xxxxx, Xxxxxxxxxx 00000-0000
Fax No.: (000) 000-0000
SOMAXON PHARMACEUTICALS, INC.
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
COUNTERPART SIGNATURE PAGE
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
INVESTORS:
/s/ Xxxxxx X. Xxxxxxx
-------------------------------------------
Xxxxxx X. Xxxxxxx
Address: c/o Latham & Xxxxxxx LLP
00000 Xxxx Xxxxx Xxxxx, Xxxxx 000
Xxx Xxxxx, Xxxxxxxxxx 00000-0000
Fax No.: (000) 000-0000
SOMAXON PHARMACEUTICALS, INC.
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
COUNTERPART SIGNATURE PAGE
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
INVESTORS:
/s/ Xxxxx X. Xxxxxxxx
-------------------------------------------
Xxxxx X. Xxxxxxxx
Address: c/o Latham & Xxxxxxx LLP
00000 Xxxx Xxxxx Xxxxx, Xxxxx 000
Xxx Xxxxx, Xxxxxxxxxx 00000-0000
Fax No.: (000) 000-0000
SOMAXON PHARMACEUTICALS, INC.
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
COUNTERPART SIGNATURE PAGE
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
INVESTORS:
THE XXXXXXX FAMILY TRUST UDT 12/30/98
By: /s/ Xxxx X. Xxxxxxx
---------------------------------------
Xxxx X. Xxxxxxx,
Trustee
Address: c/o Latham & Xxxxxxx LLP
00000 Xxxx Xxxxx Xxxxx, Xxxxx 000
Xxx Xxxxx, Xxxxxxxxxx 00000-0000
Fax No.: (000) 000-0000
SOMAXON PHARMACEUTICALS, INC.
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
COUNTERPART SIGNATURE PAGE
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
INVESTORS:
XXXXXXXX, INC. CUSTODIAN OF THE XXXXX
XXXXXXXX XXX
By: /s/ Xxxxx Xxxxxxxx
---------------------------------------
Xxxxx Xxxxxxxx
Address: 0000 Xxxxx Xxxxx
Xxxxxxxx, Xxxxxxxxxx 00000
Fax No.: (000) 000-0000
SOMAXON PHARMACEUTICALS, INC.
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
COUNTERPART SIGNATURE PAGE
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
INVESTORS:
BAVP, L.P.
By: BA Venture Partners VI, LLC,
its general partner
By: /s/ Xxxxx X. Xxxx
---------------------------------------
Name: Xxxxx X. Xxxx
-------------------------------------
Its: Managing Director
Address: 000 Xxxxx Xxxx, Xxxxx 000
Xxxxxx Xxxx, Xxxxxxxxxx 00000
Fax No.: (000) 000-0000
SOMAXON PHARMACEUTICALS, INC.
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
COUNTERPART SIGNATURE PAGE
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
INVESTOR SOLELY FOR PURPOSES OF SECTION 4:
/s/ Xxxx X. Xxxxx, M.D.
-------------------------------------------
Xxxx X. Xxxxx, M.D.
Address: 00 X. Xxxxxxx
Xxxxxxxxx, XX 00000
Fax No.: (000) 000-0000
SOMAXON PHARMACEUTICALS, INC.
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
COUNTERPART SIGNATURE PAGE
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
INVESTOR SOLELY FOR PURPOSES OF SECTION 4:
/s/ Xxxxx Xxxx
-------------------------------------------
Xxxxx Xxxx
Address: Xxx 000000
Xxxxxxxxx Xxxxxxx, Xx. 00000
SOMAXON PHARMACEUTICALS, INC.
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
COUNTERPART SIGNATURE PAGE
